Company Name: Burger King Holdings, Inc.
Public Availability Date: September 26, 2007
Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
August 2, 2007
VIA FEDEX
Securities and Exchange Commission
Division of Corporation Finance
Office of the Chief Counsel
100 F Street, N.E.
Washington, DC 20549
Re: Omission of Shareholder Proposal Submitted by Office of the Comptroller of
New York City
Ladies and Gentlemen:
Pursuant to Rule 14a-8(j) promulgated under the Securities Exchange Act of 1934,
as amended (the "Act"), Burger King Holdings, Inc. ("Burger King" or the
"Company") respectfully requests the concurrence of the staff of the Division of
Corporation Finance (the "Staff") of the Securities and Exchange Commission (the
"Commission") that it will not recommend any enforcement action to the
Commission if the shareholder proposal described below is omitted from Burger
King's proxy materials for its 2007 Annual Meeting of Shareholders (the "2007
Proxy Materials"). The Company's Annual Meeting of Shareholders is scheduled for
November 29, 2007.
By copy of this letter, we are advising the Proponents (as defined below) of the
Company's intention to exclude the Proposal (as defined below) from the 2007
Proxy Materials. Pursuant to Rule 14a-8(j), this letter is being filed no later
than eighty (80) calendar days before the Company files its definitive 2007
Proxy Materials with the Commission. In accordance with Rule 14a-8(j)(2) there
are submitted herewith six additional copies of this letter and the attachments.
The Proposal
The Office of the Comptroller of New York City, as custodian and trustee and
acting on behalf of the New York City Employees' Retirement System (the
"Proponents"), has submitted for inclusion in the 2007 Proxy Materials a
proposal requesting the Company to adopt, implement and enforce a revised
company-wide Code of Conduct, inclusive of suppliers and sub-contractors, based
on the International Labor Organization's ("ILO") Declaration of Fundamental
Principles and Rights at Work (the "ILO Declaration"), and certain other ILO
conventions ("ILO Conventions"), and to prepare a report at reasonable cost to
shareholders and the public concerning the implementation and enforcement of the
code (the "Proposal"; see Exhibit A).
Grounds for Exclusion
The Company seeks to omit the Proposal from its 2007 Proxy Materials on the
grounds that: (i) the Proposal relates to the ordinary business operations of
the Company so as to be excludable under Rule 14a-8(i)(7); and (ii) the Company
has substantially implemented the Proposal so as to be excludable under Rule
14a-8(i)(10).
Analysis
The Proposal Deals with a Matter Relating to the Company's Ordinary Business
Operations
Rule 14a-8(i)(7) permits a company to exclude a shareholder proposal from its
proxy materials if the proposal "deals with a matter relating to the company's
ordinary business operations." The policy underlying the ordinary business
exception is "to confine the resolution of ordinary business problems to
management and the board of directors, since it is impracticable for
shareholders to decide how to solve such problems at an annual shareholders
meeting." Release No. 34-40018 (May 21, 1998) (the "1998 Release"). The Staff
further noted in the 1998 Release that this policy rests on two principal
considerations: (i) "[c]ertain tasks are so fundamental to management's ability
to run a company on a day-to-day basis that they could not, as a practical
matter, be subject to direct shareholder oversight;" and (ii) "the degree to
which the proposal seeks to `micro-manage' the company by probing too deeply
into matters of a complex nature upon which shareholders, as a group, would not
be in a position to make an informed judgment." 1998 Release.
The Staff has determined that proposals for the adoption of codes of ethics and
conduct that would apply to relations between a company and its employees,
customers, shareholders or the public may be excluded pursuant to Rule
14a-8(i)(7) because they relate to matters involving ordinary business
operations. See, e.g., Barnett Banks, Inc., SEC No-Action Letter, 1995 SEC
No-Act. LEXIS 947 (December 18, 1995) (permitting exclusion of a proposal that a
company prepare and issue a comprehensive code of ethics for public
dissemination); McDonald's Corporation, SEC No-Action letter, 1990 SEC No-Act.
LEXIS 517 (March 19, 1990) (allowing exclusion of a proposal directed at the
content and implementation of standards on such matters as the company's
management, its employer/employee relations and its customer and business
policies); and Costco Warehouse Corporation, SEC No-Action Letter, 2003 SEC
No-Act. LEXIS 817 (December 11, 2003) (permitting exclusion of a proposal
requesting the board to develop a thorough code of ethics that would also
address issues of bribery and corruption).
The Proposal seeks to dictate general relations between the Company and its
employees as well as the relationship between the Company, suppliers and
subcontractors. The relationship between management and its employees is an
integral part of the day-to-day conduct of ordinary business operations. The
negotiation of wages, hours, and working conditions are fundamental business
issues for employers. The Proposal could negatively impact the ability of the
Company to manage its employee relationships. The Staff has permitted exclusion
of shareholder proposals that, like the Proposal, seek to address a company's
relationship with employee labor unions because they fall under the category of
ordinary business pursuant to Rule 14a-8(i)(7). See United Parcel Services,
Inc., (February 23, 2004) (proposal requested a report "to shareowners on the
UPS relationship with the International Brotherhood of Teamsters"); Modine
Manufacturing Co. (May 6, 1998) (proposal requested a corporate code of conduct
to address the right to organize and maintain unions); Humana Inc. (October 17,
1990) (proposal requested the company to recognize and bargain collectively with
a particular union); UAL, Inc. (March 3, 1986) (proposal requested a review of
"management's handling of union negotiation").
In Modine, the Proponent sought a resolution that would "direct the Board of
Directors to create a Board Committee to develop a corporate code of conduct
guaranteeing the right of employees to organize and maintain unions and
affirming the principles of collective bargaining in good faith." This
resolution is very similar to the Proposal, specifically where it calls for the
adoption of a code of conduct, which among other things, provides that, "[a]ll
workers have the right to form and join trade unions and to bargain
collectively." See Exchibit A. The Staff found the proposal in Modine excludable
under Rule 14a-8(i)(7). The provisions of the Proposal related to unions,
collective bargaining and employee representatives, like the proposal in Modine,
would, as a matter of policy, seek "to compel the Company to deal with a
collective bargaining unit rather than act on its own business judgment" and
"dictate a particular avenue to be pursued, and establish constraints on the
function of management." Modine
Wal-Mart Stores, Inc. also presented a proposal in parts very similar to the
Proposal. See Wal-Mart Stores, Inc. (March 16, 2006). In Wal-Mart, the proponent
requested that the board amend the company's Equality of Opportunity policy to
bar intimidation of company employees exercising their right to freedom of
association, develop systems to prevent future violations of federal labor law,
and publish periodic reports to shareholders on its progress. The company sought
to omit the Proposal from its 2006 proxy materials on the grounds that the
proposal related to the ordinary business operations of the company so as to be
excludable under Rule 14a-8(i)(7). The Staff found that there appeared to be
"some basis" for Wal-Mart's view that it could exclude the proposal under Rule
14a-8(i)(7), as relating to Wal-Mart's ordinary business operations (i.e.,
relations between the company and its employees). The Proposal, and particularly
the provisions of the Proposal related to unions, collective bargaining and
employee representatives, like the proposal in Wal-Mart, relates to the
Company's ordinary business operations (i.e., relations between the Company and
its employees).
For all of the foregoing reasons, the Company believes that it may exclude the
Proposal from the 2007 Proxy Materials in reliance on Rule 14a-8(i)(7).
The Proposal has been Substantially Implemented
Rule 14a-8(i)(10) permits a company to exclude a shareholder proposal from its
proxy materials if "the company has substantially implemented the proposal." To
be substantially implemented, a proposal does not have to be "fully effected."
See Release No. 20091 (August 16, 1983). The Staff has consistently applied the
standard that a proposal has been "substantially implemented" when a company has
previously instituted policies and procedures relating to the subject matter of
the proposal, or has implemented the essential objective of the proposal. See
Talbots, Inc. (April 5, 2002) (permitting omission of a proposal that required
the establishment of a code of corporate conduct regarding human rights because
the company had an existing Standard for Business Practice and Code of Conduct),
Telular Corp. (December 5, 2003) (permitting omission of a proposal that
required the annual election of the board of directors where by-laws
contemplated and permitted annual election of the board), and Intel Corporation
(March 11, 2003) (permitting omission of a proposal that required a shareholder
vote on all equity compensation plan amendments where board had adopted
resolutions establishing similar policy).
The Proponents' request that the Company adopt a code of conduct relative to
labor standards with which it, its suppliers and sub-contractors must comply and
that the Company prepare a report concerning the implementation and enforcement
of the code of conduct. The Company has adopted The Code of Business Ethics and
Conduct For Vendors (the "Burger King Code"; see Exhibit B) that is
substantially similar to the code requested by the Proponents. The Burger King
Code serves to:
set the standards with which Burger King's vendors and suppliers (including
their subcontractors and sub-assembly factories) must comply in their operations
and supply chains with regards to diversity, discrimination and harassment,
forced labor and coercement, child labor, wages and hours, and working
conditions;
grant Burger King the right to monitor compliance with the Burger King Code,
including the right to conduct, or have its designee conduct, unannounced
inspections of vendors' facilities and records; and
grant Burger King the right to terminate its business relationship with a
vendor or require the vendor to implement a corrective action plan if a vendor
violates the Burger King Code.
The Burger King Code substantially implements the provisions of the Proposal,
and in certain cases exceeds, the requirements of the Proposal, such as
providing for compliance by vendors of all applicable laws regarding working
conditions, including worker health and safety, sanitation, fire safety, risk
protection, and electrical, mechanical and structural safety. While Burger King
has not adopted word-for-word the ILO Declaration and the ILO Conventions
referenced in the Proposal, a review of Burger King's Code demonstrates that
Burger King has previously instituted policies and procedures relating to the
subject matter of the Proposal and has implemented the essential objective of
the Proposal.
Burger King adopted and rolled out to its food, packaging and premium vendors
(the "Covered Vendors") the Burger King Code in December 2005. In connection
with the initial approval of a Covered Vendor, Burger King evaluates the Covered
Vendor's compliance with the principles covered by the Burger King Code and
requests that such Covered Vendor acknowledge acceptance and compliance with the
Burger King Code. With respect to its U.S. Covered Vendors, Burger King attaches
the Burger King Code to its core contracts with such Covered Vendors. Burger
King and other third parties periodically conduct audits of the Covered Vendors'
facilities in the United States, Europe and the Middle East and in connection
with such audits will identify and note any issues that come to their attention
with respect to a Covered Vendor's non-compliance with the Burger King Code.
While there are no third party audits conducted currently of Covered Vendors'
facilities in the Latin America, Africa and Asia Pacific regions, Burger King
does conduct audits there and is currently examining processes for enhancing its
implementation and compliance efforts of the Burger King Code internationally.
Burger King is currently in the process of evaluating the Burger King Code and
its enforcement efforts both domestically and abroad. The Vice President, Food
Safety, Quality Assurance and Regulatory Compliance is leading this effort to
ensure compliance on a global level with food safety, quality assurance and
regulatory compliance initiatives, including the Burger King Code. Since the
adoption of the Burger King Code in December 2005, implementation and compliance
with the Burger Kind Code is within the purview of the Vice President, Food
Safety, Quality Assurance and Regulatory Compliance who reports to the Senior
Vice President, Global OperationsResearch and Development who in turn reports
to the Chief Operations Officer.
While Burger King does not currently prepare and make public a report concerning
the implementation and enforcement of the Burger King Code, the actions
discussed above demonstrate that Burger King is committed to and has taken
significant action toward the implementation and enforcement of the Burger King
Code thereby demonstrating that Burger King has previously instituted policies
and procedures relating to the subject matter of the Proposal and has
implemented the essential objective of the Proposal.
For all of the foregoing reasons, the Company believes that it may exclude the
Proposal from the 2007 Proxy Materials in reliance on Rule 14a-8(i)(10).
Conclusion
For the foregoing reasons, it is respectfully submitted that the Proposal may be
omitted from Burger King's 2007 Proxy Materials. Your confirmation that the
Staff will not recommend enforcement action if the Proposal is omitted from the
2007 Proxy Materials is respectfully requested.
Please acknowledge receipt of this letter and the enclosures by date stamping
the enclosed copy of this letter and returning the date-stamped copy in the
enclosed self-addressed stamped envelope.
If for any reason the Commission does not agree with the Company's position, or
it has questions or requires additional information in support of the Company's
position, we would appreciate an opportunity to confer with the Commission's
Staff prior to the issuance of a formal response. Please call Kara L.
MacCullough, of Holland & Knight LLP at (305) 374-8500.
Very truly yours,
/s/
Name: Anne Chwat
Title: General Counsel, Chief Ethics and Compliance Officer and Secretary
Enclosures
cc: Mr. Patrick Doherty, New York City Office of the Comptroller, Bureau of
Asset Management
Kara L. MacCullough, Esq., Holland & Knight LLP
[APPENDIX 1]
June 26, 2007
Ms. Anne Chwat
General Counsel and Secretary
Burger King Holdings, Inc.
5505 Blue Lagoon Drive
Miami, FL 33126
Dear Ms. Chwat:
The Office of the Comptroller of New York City is the custodian and trustee of
the New York City Employees' Retirement System, (the "system"). The system's
board of trustees has authorized me to inform you of our intention to offer the
enclosed proposal for consideration of stockholders at the next annual meeting.
I submit the attached proposal to you in accordance with rule 14a-8 of the
Securities Exchange Act of 1934 and ask that it be included in your proxy
statement.
A letter from The Bank of New York certifying the system's ownership,
continually for over a year of 5,300 shares of Burger King common stock will
follow. The system intends to continue to hold at least $2,000 worth of these
securities through the date of the annual meeting.
We would be happy to discuss this initiative with you. Should the board decide
to endorse its provisions as company policy, our system will ask that the
proposal be withdrawn from consideration at the annual meeting. Please feel free
to contact me at (212) 669-2651 if you have any further questions on this
matter.
Very truly yours,
/s/
Patrick Doherty
pd:ma
Enclosures
Burger Kingsocial resp. 2007
[APPENDIX 2]
Burger King Corporation - Human Rights Standards
Whereas, Burger King purchases significant amounts of produce, such as tomatoes,
for its sandwiches and salads, and
Whereas, the United States Department of Justice has successfully prosecuted
several cases of modern-day slavery in the U.S. agricultural industry since
1996, involving over 1,000 workers, (see, for example, US v. Ramos; US v. Lee;
US v. Flores; US v. Cuello; US v. Tecum) and there is increasing public
awareness and media coverage of the sweatshop conditions and abuses that many
agricultural workers face, and
Whereas, we believe violations of human rights in Burger King's supply chain can
lead to negative publicity, public protests, and a loss of consumer confidence
that can have a negative impact on shareholder value, and
Whereas, Burger King's current Code of Business Ethics and Conduct includes no
mention of human or labor rights standards for its suppliers and U.S.
agricultural workers are excluded from many labor laws that apply to other U.S.
workers (for example, National Labor Relations Act of 1935, 29 U.S.C. 151 et
seq.; portions of the Fair Labor Standards Act of 1938, 29 U.S.C. 201, 213),
and
Whereas, other multi-national corporations, including other large produce
purchasers, have implemented enforceable and meaningful codes of conduct for
their supply chains based on international human rights standards, such as the
International Labor Organization's ("ILO") standards, and
Whereas, in our opinion as shareholders, enforceable human rights codes of
conduct based on the ILO's Declaration on Fundamental Principles and Rights at
Work and other conventions and are essential if consumer and investor confidence
in our company's commitment to human rights is to be maintained,
Therefore, be it resolved that the shareholders urge the Board of Directors to
adopt, implement, and enforce a revised company-wide Code of Conduct, inclusive
of suppliers and sub-contractors, based on the International Labor
Organization's ("ILO") Declaration on Fundamental Principles and Rights at Work
and the following other relevant ILO conventions:
* Employment shall be freely chosen. There shall be no use of forced labor,
including bonded or voluntary prison labor (ILO Conventions 29 and 105);
* Workers are entitled to overtime pay when working more than 8 hours per day
(ILO Convention 1);
* All workers have the right to form and join trade unions and to bargain
collectively. (ILO Conventions 11, 87, 98, 110);
* Worker representatives shall not be the subject of discrimination and shall
have access to all workplaces necessary to enable them to carry out their
representation functions (ILO Convention 135).
The Board should also prepare a report at reasonable cost to shareholders and
the public concerning the implementation and enforcement of this policy.
[INQUIRY LETTER]
August 31, 2007
VIA FEDEX
Securities and Exchange Commission
Division of Corporation Finance
Office of the Chief Counsel
100 F Street, N.E.
Washington, DC 20549
Re: Withdrawal of Shareholder Proposal Submitted by Office of the Comptroller of
New York City
Ladies and Gentlemen:
In a letter dated August 2, 2007, Burger King Holdings, Inc. ("Burger King" or
the "Company"), requested the staff of the Division of Corporation Finance (the
"Staff") of the Securities and Exchange Commission to concur that it would not
recommend any enforcement action to the Commission if the Company excluded a
shareholder proposal submitted by the Office of the Comptroller of New York
City, as custodian and trustee and acting oon behalf of the New York City
Employees' Retirement System (the "Proponents"), related to the adoption,
implementation and enforcement of a Company-wide code of conduct, inclusive of
suppliers and sub-contractors, based on the International Labor Organization's
("ILO") Declaration of Fundamental Principles and Rights at Work (the "ILO
Declaration"), and certain other ILO conventions, and to prepare a report at
reasonable cost to shareholders and the public concerning the implementation and
enforcement of the code (the "Proposal").
In a letter dated August 14, 2007, the Company was informed of the Proponents'
decision to withdraw the Proposal (see attached letter). Consequently, based on
the Proponents' withdrawal of the Proposal, the Company hereby informs the Staff
of the withdrawal of Burger King's no-action request of August 2, 2007, related
to the Proposal.
If you have any questions, require further information, or wish to discuss this
matter, please call Kara L. MacCullough, of Holland & Knight LLP at (305)
374-8500.
Very truly yours,
/s/
Name: Lisa Giles-Klein
Title: Vice President, Assistant General Counsel and Assistant Secretary
Enclosure
cc: Mr. Patrick Doherty
New York City Office of the Comptroller
Bureau of Asset Management
[STAFF REPLY LETTER]
September 26, 2007
Lisa Giles-Klein
Vice President, Assistant General Counsel and
Assistant Secretary
Burger King Corporation
5505 Blue Lagoon Drive
Miami, FL 33126
Re: Burger King Holdings, Inc.
Dear Ms. Giles-Klein:
This is in response to your letter dated August 31, 2007 concerning the
shareholder proposal submitted to Burger King by the New York City Employees'
Retirement System for inclusion in Burger King's proxy materials for its
upcoming annual meeting of security holders. Your letter indicates that the
proponent has withdrawn the proposal, and that Burger King therefore withdraws
its August 2, 2007 request for a no-action letter from the Division. Because the
matter is now moot, we will have no further comment.
Sincerely,
/s/
Tamara M. Brightwell
Special Counsel
cc: Patrick Doherty
The City of New York
Office of the Comptroller
1 Centre Street
New York, NY 10007-2341
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